Market News

JD and BABA Keep Rolling with Spin-Off Plans

Chinese e-commerce boils down to a few basic names. One of these, without question, is (NASDAQ:JD). While the picture doesn’t look so good for retailers of all stripes, thanks to an increasingly shaky global economy, the same can’t be said for Investors drove the stock up in Thursday afternoon’s trading after plans emerged for two IPOs in Hong Kong.

Two parts of the larger umbrella—JD Industries and JD Property—will both seek listings on the Hong Kong Stock Exchange. Should the whole affair go off as planned, will still own the majority interest in both spin-offs. Interestingly, this move comes just days after Alibaba (NASDAQ:BABA) announced plans to fracture its own operation into six separate components. Each of those, much like JD Industries and JD Property, would take on different business segments.

Some might question the timing for such a major shakeup, especially as economic uncertainty piles in. However, this might be the best time for such a move. Economic weakness will drive down retail stocks to some degree, so why not experiment? Given that retail selling is still strong, the concerns about potential recession and economic weakness may be overblown, especially given the state of the job market. And has both a huge market available to it and one that’s scaling accordingly. China’s reopening following its disastrous stint with the Zero-COVID policy definitely helps.

Regardless, Wall Street is on board in a big way. Analyst consensus calls stock a Strong Buy with 11 Buy recommendations to two Holds. Furthermore, thanks to the average price target of $72.08 per share, it also comes with a healthy 61.29% upside potential.


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